Case study: Action Response
Summary: Action Response is a London-based charity that provides globally temporary cash aid to
those who need it. Receives a request for cash aid usually from another (intermediary) charity. Fills an
important gap in aid provision to relatively small-scale recipients. Also gives advice and counselling on
how to apply for longer term funding.
Aid requests
Cash aid
ARAPU
Staff hours Advice and counselling
Performance
Objectives
Quality speed
dependability flexibility
and cost
We are more flexible than most charities. If there a need and if they need
support until one of the larger charities can step in, then we will always consider
a request for aid (Jacqueline Horton, Applications Assessor)
– Performance objective of FLEXIBILITY
Funds are not getting through the process quickly enough
– Performance objective of SPEED
Costs of running the charity operation are increasing
– Performance objective of COST
Goods/Service It is both a good (The Cash Aid) and a service (Advice & Counselling).
4Vs Used when you need to analyse how processes are operations differ between
different products/services.
Volume
Variety
Variation (in
demand)
Visibility
(Customer
contact)
High Volume as they are dealing with many small projects that require funding.
The Variety is not entirely low as not only do they provide the funding, but they
also provide counselling. The variation in demand is also quite low, as they are
providing quite a vital service there will always be constant demand. Even if
bigger charities step in and take over a project, there will be newer charities
ready to look for help or funding. When receiving the counselling, the process is
very visible to the consumer. However, the process of the verification till how
they get the money isn’t – therefore, it sit’s about half way.
Inputs Transformed Resources: Aid Requests
Transformed Transforming Resources: Staff Hours
Resources
Transforming
Resources
Why is Operations Management important in Action Response?
Strategic Level:
Provide short-term quick aid - If the process cannot turn round applications quickly,
it is failing the basic aim.
Operational Level:
Funds need to get through quickly enough.
Costs need to be controlled and not allowed to spiral.
To minimize the proportion of our turnover that is spent on administration.
Increase speed of decision making.
Operation The ARAPU Processing
process Applications
Product
Cash Aid Very Important Very Important
Advice & Not Important
Important (The
Counselling (There is no need
advice is given at
to give advice at
this stage)
this stage).
What is the main problem with the current process?
Process Throughput time:
TPT = WIP × CT (Little’s Law)
WIP = applications in progress, including the queue
= 300 + 100 + 2000 = 2400
CT = 300 each week = 35/300 h for each = 0.117 h
TPT = 2400*0.117 = 281 h = 8 weeks = 40 days
Target of 20 days is actually double
How much work is 1 Application:
Minutes
Receipt clerk 10
Coding clerk 20
Assessor 47.5 (aver.)
Payment and decline clerk 40 (aver.)
Dispatch clerk 10
TOTAL 127.5
Efficiency of the Process:
Efficiency of the process can be defined as
"Value−adding work time"
-------------------------------------------------
"Throughput time"
("127." 5 ("mins" ))
-------------------------------------------------
("281 (hours) " ∗60 ("mins" ))=0.76%
Less than 1% of the time is used for value-adding work!
Problem with underutilisation:
Another stated problem is locating applications on client requests
- 2 of the 4 receipt clerks works now in locating the applications
- This means that the load of 4000 min / week now falls on 2 clerks instead of 4
- However, as these clerks are underutilised (16 h / week), it is not a problem that
one clerk has the workload of two
How can the process be improved:
Main problem is long TPT; how to decrease it?
By decreasing CT (cycle time) => the decision-making committee should meet more
often than once a week
Eliminate applications that need further information
Application process could be improved so that applicants would not miss important
information
Introduce electronic application processing to eliminate the need for staff seeking
missing applications
